Why conventional wisdom about enterprise gamification is flat out wrong

I keep a close eye on what new enterprise gamification companies have to say; after all, I too am in the game and I want to see what my competition is writing.

I am always disappointed (and surprised too) when I see the following texts, typically in the marketing text of a company that touts its sales gamification: “ignite competition”.

Come on! If competition was the only driver for sales gamification wouldn’t companies just be better off with a sales competition and good sized cash bonuses? Why spend time and money on enterprise sales gamification?

What is the third drive? It begins with monkeys and a puzzle. In the 1950s a scientist noticed that monkeys were engaged in puzzle solving even when there was no reward. This was a surprise. They were supposed to only dedicate themselves to the task if it provided them a reward. A raisin, a banana. But no, “the performance of the task … provided intrinsic reward”.

When monkeys were offered raisins as a reward for solving the puzzles, they “actually made more errors and solved the puzzles less frequently”. The introduction of an extrinsic reward seemed to extinguish the intrinsic reward; it was also a poorer driver of problem solving ability.

More money? less “third drive” and less intrinsic motivation

Two decades later research found that “when money is used as an external reward for some activity, the subjects lose intrinsic interest for the activity”. Rewards do boost activity, but their effects wear off soon and the longer term behavior is that of less engagement and motivation as was before.

Pink argues that the assumption that individual performance improves with short term incentive plans and pay for performance is wrong. Not only do these schemes not work. They may even cause harm, and we have the science to prove this.

Motivation can be intrinsic or extrinsic. Intrinsic motivation is the satisfaction of doing something better, with autonomy and a sense of growing mastery. Extrinsic motivation is doing something for a reward or competition.

Yet many studies show that extrinsic rewards “tend to have a substantially negative effect on intrinsic motivation… when institutions – families, schools, businesses, and athletic teams, for example – focus on the short term and opt for controlling people’s behavior… they do considerable long-term damage”.

The book then tells the story of an experiment by Dan Ariely and others, in Madurai, India, to understand the effects of extrinsic incentives on performance. People were offered small, medium and large rewards for reaching performance levels when playing a game. Small rewards were equivalent to a days’ pay, medium rewards were equivalent to about two weeks’ pay and a large reward was equivalent to about five months’ pay. What were the results? The low and medium rewarded groups performed about the same. But the highest incentives led to worse performance. The bottom line? “one cannot assume that introducing or raising incentives always improves performance”.

Performance gamification is about intrinsic motivation

That’s why you should never think of enterprise gamification as a way to set goals or reward employees or drive them through competition. Think instead of how to use intrinsic drivers and how to use gamification to do just this. It’s possible. I will discuss what these are and how they can be achieved through gamification in later posts.